GoGreen gets to North America

DHL’s GoGreen climate change program has reached North America’s shores, but not the U.S.  A year after the GoGreen launch in Europe the German package express delivery and logistics has made it available in Canada.

DHL Express Canada’s GoGreen service is described by the company as a “carbon-neutral” shipping option that “enables Canadian businesses of all sizes to ship their goods internationally without leaving an environmental footprint.”

DHL adds that the value-added service that makes use of carbon offsets and low emission transporation technologies provides companies with a seamless, eco-friendly friendly shipping option; it’s available from anywhere in Canada to more than 220 countries around the world.

Costco’s first CSR

Costco Warehouse Corporation has completed its first corporate sustainability report; it’s a worthy first effort but even the company execs admit there’s more work ahead for the world’s eighth largest retailer.

Shopping at Costco’s massive retail warehouses has always been a low-tech, do-it-yourself experience.

Paper or plastic is a question unasked at the checkout line; the best one can do is opt for a recycled cardboard box that might once have contained kumquats, underwear, olive oil or detergent.

So in that respect the Issaquah, Wash., retailer has taken a somewhat sustainable approach since its 1983 inception that also saves on overhead.

In its first Corporate Sustainability Report, which covers the 2007-2008 period, Senior Executive Vice President and Chief Operating Officer Dick DiCerchio admits that Costco’s environmental reporting “is still evolving. We recognize the need to report more environmental metrics information in future reports.”

Hep cat: Puma’s sustainable paw print

The German “sportlifestyle” company Puma is an old hand at a relatively new corporate exercise, the sustainability report.

The footwear, apparel and accessories designer published its fifth sustainability report last week. The 121-page opus covering the 2007/2008 reporting period was released exclusively online “for environmental reasons.”

In the latest sustainability report Puma sets a goal to reduce energy and water consumption and “waste creation” 25 percent by 2010 based on its results during its 2005/2006 reporting period.

It’s “only” five sustainability reports but the company issued its first such report in 2001, virtually the dark ages for the term “corporate social responsibility.”  So Puma is in its tenth year of CSR reporting. Most other companies are on their first or second, or have yet to start. Puma’s experience shows in the organization and depth of its CSR programs.

The report details the company’s progress to enhance working and social standards in its supply chain, build capacity at its suppliers’ factories, broaden its range of sustainable products and reduce the company’s environmental footprint through the PUMAVision category puma.safe.

It also outlines PUMA’s activities in supporting artists and creative organizations through the puma.creative category and initiatives to support global peace through puma.peace.

Puma says the Puma SAFE concept “creates a symbiotic relationship between our environment, employees, business partners and other stakeholders.

“Our aim is not only to make the production of our products transparent and environmentally friendly to our partners and target groups, but also to continually improve our standards,” the report says.

Full integration of environmental policy remains “a big challenge…our long-term economic prospects depend on embedding environmental protection and sustainable development in our business strategy” by eliminating harmful substances in products and controlling air, water and land emissions.

Puma says it was the first sporting goods company to ban PVC (polyvinyl chloride) from its product range because production and disposal of PVC can damage the environment. Puma instead works with alternative products such as polyurethane, silicon, ethylene vinyl acetate or rubber.

It has a strict restricted substances list that can be found in the 109-page puma.safe Handbook, Environmental Standards.

The company chairs the Federation of European Sporting Goods Environmental Committee and has established Environmental Key Performance Indicators to track its environmental performance.

More recently it has extended this monitoring to its logistics and supply partners “whom we invite and support to develop their own environmental management systems.”

Puma says it adhered to strict environmental and energy-saving standards when it built its new company headquarters in Herzogenaurach, Germany. It features a 1,000 square meter (10,764 square foot) photovoltaic power system coupled with another 140 square meters (1,507 square feet) of solar modules built into window facades. The company says this will save 35 tons of CO₂ a year.

For the first time Puma tracked the CO₂ emissions of its logistics operations worldwide, “taking onto consideration the transport from the country of production to the main warehouses worldwide, where the final distribution to retail stores occurs.

Puma found that across all transport modes it hauled more than 119 tons of freight in 2008, producing 64.1 tons of CO₂ emissions. The biggest emissions came from sea and airfreight transportation providers.

Puma says that in cooperation with its main logistics provider, Maersk Line, “we continue to explore possibilities to reduce the environmental ‘paw print’ of our logistics operation. Options include the use of combined sea-air shipments to avoid longer air transport segments, consolidation of shipments to ensure the greatest efficiency and as far as possible direct deliveries to avoid “unnecessary transport gaps.”

Because it is still early in this process Puma has not yet developed CO₂ emission reduction targets for its logistics operations. It voluntarily reports its CO₂ strategy and emissions, including logistics and direct suppliers, each year to the Carbon Disclosure Project.

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Sustainability and energy management

Energy management initiatives for corporations are becoming crucial factors for their sustainability efforts and the bottom line.

Energy management as a concept began as a cost-saving initiative, “but is now starting to become a strategic part of the company’s larger corporate social responsibility program,” says Aberdeen Group in a recent report, Energy Management, Driving Value in Industrial Environments.

The benchmark study of 230 executives conducted by Aberdeen research analysts Mehul Shah and Matthew Littlefield found that companies that are considered “best-in-class must do three things effectively:

–          Include energy management in corporate-wide sustainability initiatives;

–          Provide real-time as well as historical energy data to the appropriate employees that they can use as “actionable intelligence;”

–          Invest in automating energy management as much as possible to gain visibility in into the energy data while integrating it with existing technology investments.

By implementing those actions, the top rank companies can achieve a 15 percent or more reduction in energy consumption, an overall equipment effectiveness level of 90 percent and an impressive 14 percent increase in operating margins relative to corporate goals.

Solar site competition heats up

China’s SunTech Power Holdings, a major manufacturer of solar energy products, has announced plans to open manufacturing operations in the U.S., and Oregon is high on the list of potential site locations.

According to the Portland Business Journal, a SunTech executive says that Oregon was the most aggressive suitor for the site, with state representatives traveling several times to China.

“They’ve been pursuing us long before we even made a commitment internally to even build a plant in the U.S.,” said Steve Chadima, vice president of external affairs in the publicly-traded company’s U.S. operations unit, in the BizJournal report. Oregon is “pretty much at the top of the list in terms of their aggressiveness.”

SunTech is the world’s largest manufacturer of crystalline silicon photovoltaic modules with $3.3 billion in total assets. The company did not disclose the other potential U.S. plant sites under consideration. It also has not disclosed the scope of its potential investments in the U.S.

Oregon is becoming a center for solar manufacturing. Germany’s SolarWorld AG last year opened a 480,000-square-foot solar cell facility in Hillsboro, just outside of Portland, that is North America’s largest. The company is expanding the facility by an additional 210,000 square feet.

Sustaining sustainability

On the corporate sustainability front there are signs that that it is moving beyond mere PR and blue-sky vibes. It might even be true, descending at last from somewhere past Mars on the corporate visibility scale to an Earth-based reality.

Speaking of Mars — the candy company of the same name, that is — it has claimed it is the “first global chocolate company to commit to fundamentally changing the way sustainable cocoa farming practices are advanced by aiming to certify” that its entire cocoa supply is produced in a sustainable manner by 2020.

It wants to achieve this through collaboration with the Rainforest Alliance, an international non-profit. They unveiled new goals in their ongoing campaign to help cocoa farmers get on the path toward sustainability. They agreed to redouble efforts to help thousands of farmers meet holistic social and environmental standards so that their farms could earn Rainforest Alliance certification.

Near-term, Mars aims to buy enough certified cocoa so that the Galaxy chocolate bar, for example, which is highly popular in the United Kingdom, can bear the Rainforest Alliance Certified green seal of approval by early 2010.

The Rainforest Alliance accepted the company’s challenge to bring enough farms up to code so that 100,000 tons of Rainforest Alliance Certified cocoa would be available each year by 2020.

Let’s hope it’s aim is true. Mars says this is the “latest milestone in a long-running sustainability effort,” and demonstrates a “real commitment” to sustainable farming.

“Mars’ commitment to buying sustainable cocoa is unprecedented in size and scope, and the benefits to farmers, farmworkers, tropical environments and wildlife will be tangible,” says Tensie Whelan, president of the Rainforest Alliance. “This initiative is an example of the tremendous impact global companies can have when they commit to sustainability.”

Another indicator that sustainability is becoming serious business in corporate boardrooms came recently from the non-profit Center for Sustainable Innovation, which released a new model for measuring corporate sustainability performance.

It’s called the True Sustainability Index. CSI’s model comprises 15 indicators that sustainability managers can use to assess the full triple bottom line performance of their organizations. TSI says the model will be useful in their attempts to understand, rate and rank the sustainability performance of organizations as a basis for making investment decisions.

The model features indicators and metrics that track or measure organizational greenhouse gas emissions, an organization’s impacts on air quality, water use, non-water natural resources, organizational emissions of solid wastes, impacts on ecosystem habitats, flora, fauna and biodiversity. Another set of indicators assesses an organization’s impacts on human capital, its contributions to creating and maintaining social institutions, social infrastructure and livable wages.

Unlike other sustainability indexes and there are many of them around, the TSI is made up of metrics that are context-based, meaning that they express organizational performance relative to actual social and environmental conditions in the world. Water consumption, for example, is measured against renewable supplies; solid wastes are measured against landfill capacities; and impacts on social and economic conditions are measured against societal needs. The model released that was released late last month “is an early prototype – an 80-percent solution – and remains a work in progress,” CSI says.

CSI’s context-based approach to measuring and reporting organizational sustainability stands in stark contrast to other mainstream reporting methods and indexes, most of which are context-free.

Even the Global Reporting Initiative (GRI), which advocates for the inclusion of sustainability context in related reports, fails to provide firm guidelines on how to do so. Most, if not all, GRI reports are therefore “devoid of context,” according to CSI, and “rarely make it possible to understand the true sustainability performance of the organizations they describe.”

Perhaps the time is right for sustainability. A recent survey from the American Marketing Association and Fleishman-Hillard, Inc. found that nearly 60 percent of corporate marketers expect their companies to increase environmental sustainability initiatives over the next two or three or years. Also, one-half of those surveyed said current economic conditions will encourage the adoption of sustainability practices. Click here for their survey report.

The key is that for the sustainability impetus to sustain itself further it has to move beyond the prototype stage, with clear and universally accepted guidelines and standards. TSI looks like a great step. Give ‘em a chocolate bar.

Sustainability and value creation: Investors are paying attention

These days it’s not just about following the money. More importantly, it’s also about finding the best way to find the money that’s out there while making the process more visible and transparent.
That’s a tall order for companies trying to do the right thing on the sustainability front while delving into the murky world of finance and investment for funding, which by its very nature is prone to opaqueness, complexity and secrecy.
Simply put it’s tough to reach investors even in a solid financial and economic environment. So dotting the i’s on sustainability is becoming a crucial piece of the funding puzzle.
That’s where the Global Reporting Initiative, an Amsterdam non-profit, enters the picture. It has developed a framework for disclosure on environmental, social and governance data – also known as ESG disclosures or sustainability reporting – and in a report this week says that companies that fail to link their sustainability reporting and activities to an overall corporate strategy likely will fail to connect with investors.
The report – “Reaching Investors: Communicating Value through ESG disclosures” – was written following “extensive consultation” with the finance industry.
GRI says investors have been a key driver in promoting sustainability reporting – they are increasingly asking companies for ESG information to help them make their investment decisions. Assets of more than $15 trillion – or about 15 percent of total global capital markets – are now managed by signatories to the United Nations Principles for Responsible Investment (UNPRI).
“UNPRI signatories commit to integrating ESG issues into investment analysis and to seek appropriate disclosure on ESG issues,” GRI said. The disclosure is based on the GRI reporting framework.
Sean Gilbert, Sustainability Reporting Framework Director at GRI said: “As we can see from the number of investors now actively seeking ESG information in order to help them base investment decisions, the dichotomy between sustainability and long-term business value is false.”
But the report says that for the ESG data to be useful to investors “it must be presented in a consistent way,” in a combined sustainability and annual report, for instance, or in separate documents such as CEO or board statements.
The link between a company’s performance on environmental, social and governance issues and its business strategy is crucial, the report says. “Without this link investors will have no way to gauge what the ESG disclosure might mean for the financial bottom line.”
Sustainability reporting should demonstrate “how the company’s behavior in a rapidly changing economic, environmental and social context is affecting its long-term value – for example how the company is dealing with risks and opportunities presented by climate change or how it is addressing poverty and inequalities in the communities in which it operates and thus derives its workforce and consumers.
“In this context, business has to think differently and perform differently and, as we’ve seen, investors are increasingly seeking out ESG leaders. Sustainability reporting should help investors find those companies as well as help the companies understand how they themselves are positioned in the context of sustainability,” Gilbert said.
It may be that companies and their potential investors are getting it; that a company’s green and sustainable strategy must be an integral part of the overall corporate strategy if they expect to get some greenbacks. A recent survey from the financial research firm KPMG says the majority of the Global Fortune 250 companies now issue sustainability reports.
Given recent financial history it might also help if investors were to implement some sustainable reporting, and lending, of their own.
The report can be downloaded on www.globalreporting.org